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A SLICE OF THE HIGH LIFE 25 OCTOBER 2007

An introduction to fractional ownership and asset-sharing

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AN INDEPENDENT SUPPLEMENT FROM MEDIAPLANET ABOUT FRACTIONAL OWNERSHIP, DISTRIBUTED IN THE TIMES


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AN INDEPENDENT SUPPLEMENT FROM MEDIAPLANET ABOUT FRACTIONAL OWNERSHIP, DISTRIBUTED IN THE TIMES

A SLICE OF THE HIGH LIFE

Introduction

Fractional ownership and asset-sharing What is fractional ownership and asset-sharing, and what are the social changes that have lead to its tremendous growth?

CONTENTS Property

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Supercars

6

Boats and yachts 8-9 Private aviation 10-11 Case studies

12

Property abroad

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A SLICE OF THE HIGH LIFE A TITLE FROM MEDIAPLANET Project manager: Yusuf Moosajee 0207 563 5883 Editor: Aaron Weddell Production Editor: Katherine Woodley Design: James White Prepress: Jez MacBean Print: News International Mediaplanet is the leading European publisher in providing high quality and in-depth analysis on topical industry and market issues, in print, online and broadcast. For more information about supplements in the daily press, please contact Freddie Ossberg freddie.ossberg@mediaplanet.com www.mediaplanet.com Front cover images courtesy of David Pearce Car Photography/ Group 20, stevehallphotography.net, Marque II and 47 Park Street.

Never before have such a broad range of goods and services been so readily available to such a great proportion of the population. This is the internet age; music, groceries, consumer durables and information are never more than a few mouse clicks away. In fact, they are often closer still, thanks to ever developing mobile internet technologies, be it via the once humble mobile phone or through one’s laptop utilising wifi hotspots. In short, pretty much everything your heart ever desired is at your thumb and fingertips. But how is this related to fractional ownership and asset sharing? The contagion effect of this ease of availability and instant gratification is that, as consumers, we have grown to expect that the wider aspects of our lives are just as accessible. If one can order exclusive goods from the other side of the globe within a few moments, then why shouldn’t everything else be available at breakneck broadband pace? If I order the latest sports car, then I don’t want to be at the end of a 36 month long queue, I want to pay my money and be cruising down to the South of France as soon as possible. Of course, patience remains a virtue, but in an often uncertain world, where the busy professional works longer hours than ever before and, all the while, the world lurches from terrorist threat to ecological disaster, people are aware that time is precious. This ‘want it all, want it now’ generation is moving away from the more traditional methods of obtaining the accepted societal demonstrations of wealth—luxury vehicles, exclusive vacation properties and private aviation, amongst others. They still aspire to such end-user heights,

but today’s cash rich, time poor individuals are generally a touch more clued up when it comes to managing their conspicuous consumption. It is not simply a case of blind purchasing to satisfy their consumer desires, but balancing spending between experiential reward, financial outlay and, most topically, environmental impact. They require all of the accoutrements of a traditional luxury lifestyle, but without the chore and expense that full ownership entails. This has created a consumer breed referred to by trend watching gurus as ‘transumers’ or ‘fractional lifers.’ This group values not the actual ownership of goods, but instead focus on the experiences that those goods can provide and the short term reward. This shift has led to the rapid rise in popularity of fractional ownership and asset sharing. First, to cover fractional ownership, this is the concept of dividing an expensive asset into percentage shares and selling those shares to individual owners. Each person who owns a fractional share then gets a relative percentage use of the asset, with a management company handling the asset and fractional owners paying

fixed fees for this management, sometimes in addition to variable fees for usage. Fractional owners can benefit from capital appreciation, although, on the flip side, they may suffer from depreciation. For markets that do not traditionally lend themselves to fractional ownership, such as those involving rapidly depreciating assets (motor vehicles for example), the asset sharing model is utilised. This generally involves a membership fee and, sometimes, a further usage fee, allowing the member access to the use of the assets, e.g. a fleet of supercars. There are no ownership links between mem-

bers and assets, so there is no investment potential in this model. Fractional lifers desire designer accessories, exotic cars, membership of the best golf courses and holiday homes, as well as the über-luxury goods previously only available to the ultra-rich, including yachts, private aviation and dabbling in pastimes such as racehorse ownership, but they wish to dip into and out of these experiences rather than commit themselves to full ownership. “Consumers realise that their lifestyles are finite—life is now. Does this mean they have to own everything to seize and enjoy it? Because of this, the value of luxury and ownership now differs considerably within their psyche. Fractional is the answer,” so says Piers Brown, founder of Fractional Life. On the one hand, some may suggest that fractional ownership and assetsharing only gives you a fraction of the experience—where is the sense of achievement and satisfaction in owning your own holiday property/yacht/supercar/etc that you know you worked so hard for? Obviously, the fulfilment of full ownership is one aspect that fractional ownership or asset-sharing can never hope to replicate, but transumers view this from a different perspective, with the value coming from the shortto medium-term experiential satisfaction rather than that of longer-term commitment. Although broader acceptance of fractional ownership is only just filtering into the daily lives of many consumers, already for some fractional lifers, fractional ownership is, as the appellation suggests, a way of life.

IN ASSOCIATION WITH

FractionalLife.com acts as a comprehensive 'fractional superstore' and offers the most incisive and detailed content available for one to explore the growing plethora of fractional opportunities and asset sharing within the marketplace today. Offline you can talk with a multitude of fractional operators face to face at the Fractional Life Expo - free to visit, the annual open-air event is totally dedicated to everything fractional. The next event will be held 28 - 30 April 2008 at the prestigious Broadgate Event Venues in the heart of London. For more information log on to www.fractionallifeexpo.com


You can’t buy these properties...

…but you can own them. If you would love a holiday home in Europe, but can’t decide between the beach or mountains, the city or a rural location, The Hideaways Club could be the perfect answer. As a member, you, your family and friends will enjoy luxury holidays throughout the year in any of our exclusive, beautifully-appointed properties across Europe and the Mediterranean. In addition, you’ll also own a share in the whole property portfolio, which means you enjoy the benefits of investing in and owning property, without the hassle of sole ownership. For more information, please call us on 020 7664 8860 or email membership@thehideawaysclub.com

©2007 The Hideaways Club. The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act

2000. Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all of the property or other assets invested. Membership is only for self-certified sophisticated investors or certified high net worth individuals.


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A SLICE OF THE HIGH LIFE

Property

Property: destination and private residence clubs Holiday cottages or exclusive residences in exotic locations—the choice is yours.

A holiday home is possibly the ultimate discretionary acquisition, something that many people would like to have but no one truly needs. Such a property, set in an idyllic location, is the aspiration of the vast majority and it is clear that more individuals and families are buying into the privilege. One may long for their very own property located in a more temperate climate, yet they may never take the plunge for any number of reasons. The key issue is financial, whether it is simply a limited budget or trying to justify spending a large amount of money on something from which you are going to get limited use, yet you have to be responsible for all year round. The average person only receives five weeks of holiday a year and, yet, if you buy a property abroad, you are paying for it and the associated costs throughout the entire 52 weeks of the year. With fractional ownership, because you are only buying a part-share of the property, you can afford to buy something much

nicer than you could ever fund outright. In effect, you are spreading your investment and owning a superior quality holiday home. This is not just the ‘poor-man’s’ choice but also the smarter choice, even for those who would traditionally plump for the time, honoured outright purchase. As Karen Kennaby of Affordable Millionaire summarises, “I am delighted to see this market begin to rapidly expand. Fractional ownership has phenomenal growth potential, as it can give you both a wonderful second holiday home and an investment combined. Statistics prove that most people only use their overseas or U.K. second property for 17 days a year, so why leave it empty? Furthermore, everyone shares in its maintenance and upkeep, and, consequently, these bills are much lower, and as a result, it can be kept in pristine condition. You don’t have to worry about decorating or new furniture—it’s done for you. It’s totally stress free, enabling you to just enjoy your time in your

property. It’s all part of the service.” Fractional property generally falls into one of two categories, destination clubs and private residence clubs, although some schemes will be referred to as simply ‘fractional property,’ which generally means that it will be part ownership of a single property. The terminology can be confusing and the terms often misappropriated, or a particular scheme may take elements from both categories, so you may find some companies that might fit closer to a destination club, but which refer to themselves as private residence clubs. Either allows one to experience around four to 12 weeks of ownership privileges at a luxury resort(s) around the world or residence club at the fraction of the cost of full ownership, yet with benefits that extend beyond which you would expect of sole ownership. Each offers an enticing alternative to fully owning a luxury holiday property. Both provide fully serviced and maintained luxurious, finely fur-

nished and well-appointed properties to their members and owners. In which case, if you are considering fractional property, it is best that you explore both possibilities rather than limit yourself to one type from the outset. Both are initially similar in that they require an upfront payment to purchase a membership or share and then both have annual maintenance overheads. The biggest difference is that, with private residence clubs, you are buying a share in one property in one location, although some offer the opportunity to swap your time and location with other residences within the company portfolio. Destination clubs differ in that they give you a range of properties at your disposal. The key appeal of the former is that you can return to the same area and really get to immerse yourself in the local lifestyle. Paris Pied-à-Terre operate French private residence club schemes. Owner and founder Walid Halabi enthuses, “At Paris Pied-à-

Terre, you also get a level of services and amenities that no other programs are offering in Paris, so you get to live like a true Parisian.” David Burden, founder and president of Timbers Resorts agrees, “It’s one thing to live the authentic local lifestyle, it’s another to indulge in it.” On the other hand, variety is the spice of life, so a destination club may be more suitable for your needs. David Rogers, founder of Rocksure Property, elaborates, A Rocksure Property Fund addresses all the negatives of second home ownership with its programme A House for All Seasons. The fund provides shared ownership of six beautiful houses around the world (Brazil, Phuket, Marrakech, the Algarve, the Adriatic Coast and Colorado), which combine to offer year-round sunshine with an investment benefit at the end of seven years enjoyment.” So it comes to down to whether your holiday retreat is to be somewhere familiar in a location you love which you would want to return to year-in, year-out or something altogether more diverse. Equity sharing Historically, destination clubs were not the first choice of those seeking true fractional ownership, as they provided non-equity memberships following the asset-sharing model, whereas private residence clubs offered an actual titled share of a property. Now it is common for destination clubs to offer equity sharing models in a variety of guises, so it is important that you are aware of exactly what you are buying into. Owners of private residence clubs own actual real estate and have a title and deed. Usually, the title deed is divided into fractions ranging from a quarter to a twelfth. This gives you the right to stay in the property for the corresponding fraction of the year, although it is prudent to be aware that it is unlikely that you will be able to use ‘your’ property for the same month each and every year. You can also arrange to sell your fraction whenever you choose. A management company runs the property and each fractional owner contributes to an annual maintenance fund. As such, the owners can gain or lose as the real estate values move with the market—any gains made will be modest, but, on the flipside, so would any losses, as you are insulated against any price fluctuations, good or bad, by virtue of the fact that any risk or reward is spread across your fellow owners. So it is not going to make you a property magnate but, generally, fractional owners are not looking to make a killing money-wise but instead to have a holiday getaway with a modicum of investment potential.


THE COMFORTS OF HOME Discover your home in Mayfair: the discreet and luxurious comfort of a private residence, with uncompromising levels of service that quietly anticipate, even exceed your expectations. Because you can store your clothing and personal items with us in between visits, your arrival is very much like coming home; letters waiting to be opened on the hall table, your wardrobe pressed and hanging in the closet, your favourite foods and wine stocked in the refrigerator and your family photos arranged on the night stand. Home at last. The property’s concept of fractional ownership allows you to own a share of a residence at 47 Park Street, to be used at your convenience, while providing the amenities and service of a five-star hotel. Fractional ownership, under stewardship of the world renowned Marriott brand, eliminates the burden of managing your second home, provides compelling financial options, gives you personal flexibility and extends your lifestyle. For more information about this unique residential opportunity, visit www.47parkstreet.com, call +44 (0)20 7950 5528 or email info@47parkstreet.com. The show residence is open daily by appointment.

47 Park Street • Mayfair • London W1K 7EB • +44 (0)20 7950 5528 • www.47parkstreet.com


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Supercars

Supercars Fantasy garages. All car enthusiasts have them—five, ten maybe even 20 cars that, in an ideal world, would be residing in a purpose built hermetically sealed garage, a mental selection of classics and supercars linked by their desirability and high cost. The problem is that for, most of us, these fantasy garages remain just that—a fantasy. Even with the funds at your disposal, it is unjustifiable on economic grounds to tax, insure and maintain more than a few cars at a time. Also, when you think about it, how many truly memorable journeys do you really make? Of course, it would be great to take a Ferrari to the local supermarket, but when you finish your weekly shop, you have very little boot space in which to store your purchases and someone will have left an expensive dent in both your door and your wallet. It is around this point of contemplation that one realises that there is not necessarily a want to own such a fleet but merely to experience the thrill of driving them. Which brings us neatly to car clubs, the next best thing to owning your very own slice of classic or supercar motoring. For a relatively nominal sum, a club will give you the keys to a whole fleet of some of the most coveted metal, without having to spend months on a waiting list or wasting hours trawling the classifieds for that perfect classic motor. As costly assets to maintain, car clubs tend to adopt the asset sharing model—the shelf life of individual cars

is relatively short in order to keep fleets fresh, resale values are as high as possible (the market for high-mileage Lamborghinis is near non-existent!) and maintenance and consumable costs are kept to a minimum. Also, it allows for a greater range of models to be purchased by the club. Chris Burbidge of Club GT explains further: “Asset-sharing is a great way to experience some of the finer things in life that you may not get a chance to if you had to buy them all outright, but it’s not just for those that can’t afford to buy, it’s also much more convenient and cost-effective if you don’t need the asset all year round.” Erik Fairbairn, managing director of ecurie25, talks about the philosophy behind his own supercar club, ecurie25: “ecurie is French for stable and we aim to be like your own personal groom. At the end of your driving experience, you can simply drop off your car and we’ll clean it and take care of it and make sure it’s ready for the next member’s outing.” The standard format is one of membership costs covering points and mileage values that can then be ‘spent’ throughout the year across the fleet, with the points of each hire being de-

0ARIS p i e d - à - t e r r e

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Phone: +33-(0)631170303 email: wh@parispiedaterre.com website: www.fractional.parispiedaterre.com

pendent on the grade of car, time of year and weekday or weekend use. How your points are used is down to you, but generally between 35 to 50 days use per year is the norm, obviously less if you want the top-ranked vehicles only for weekend use during the summer and more if you opt for off-peak weekdays in lower band cars. But not all car clubs are created equal and each offers something slightly different from the next. There are the obvious differences such as different cars, with the likes of the Classic Car Club and Parc Ferme offering a different range of models to their supercar sisters, with Parc Ferme also offering a wide range of classic motorcycles alongside their classic car collection. Template P1 International are the template for many new car clubs, having pioneered the concept of shared access to supercars when launched in October 2000. They offer not only a London branch but just over a year ago opened the doors to P1 North in Chesire so offer an alternative to their often London centric competitors. Michael Breen who founded the club with Damon Hill, spoke to us about what makes P1 a continuing success “We offer the largest choice of cars with over 45 of the greatest drives on the planet available to the largest membership base of any of the car clubs. Our longevity and experience in this sector should make potential members feel secure in their choices both in terms of financial and enjoyment potential. In the near future we are looking to expand overseasthus lending an extra dimension to the P1 experience.” One company bucking the usual membership ‘points for cars’ trend is Group20, who base their members’ time with the cars on a ‘fair-play’ policy as marketing director Harry Mclennan explains: “The proposition is unique; a fair-play policy gives members unrestricted access to the cars, providing that the access is fair and doesn’t impede on the provision of service to other members. Through this policy, Group20 can offer a service which boasts no cancellation charges, no annual mileage limits, and no excess mileage charges.” Different clubs also look to position themselves differently, The Segrave Club are a new enterprise who are who are pitching themselves at those who only crave the top flight supercars. Segrave chief executive Nick Hancock let us in on the company outlook: “The new club has been created to answer the fundamental problem with existing shared access car clubs—that 80 per cent of their members only want to drive the top 20 per cent of the cars. As such our lowest group of vehicles

Courtesy of P1 International is equivalent of the top tier of the other clubs.” But there can be even greater differences such as those demonstrated by RevoWorld a car club founded by

Asset-sharing “ is a great way to experience some of the finer things in life

one of the pioneers of the section John Llewellyn. The difference being that it’s not so much a car club as a lifestyle one who allow their members to spread their points across not only supercars but well, pretty much anything! Chief executive Carl Thomas guides us through their story “We came to realise that car clubs are great if you just love cars but often those that appreciate fine cars also want other luxuries available to them. Accordingly, we offer what can be neatly summarised as the ‘ultimate concierge service’- our members can access supercars, helicopters, yachts, private jets, hotel reservations and many other goods and services all through our team who know all our members personally. In practise that means that a member on a Revoworld yacht for example will have the catering and drinks available that we know they like. We also organise very exclu-

sive networking events for our members and potential members, which is often quoted as the reason our members joined up.” Although it is fair to say that club representatives are inclined to represent the concept in glowing terms, there is also a whole host of satisfied car club members ready to offer testimonials, so we will leave the last word to a club member, Richard Fischer. It was the cost of running his Porsche 911 Carrera 4 that prompted Richard to join a supercar club. The City executive spent £55,000 on a one year old 911. He sold it after less than two years of ownership for £38,000, having spent annually about £1,600 on insurance, £1,000 for replacement tyres and between £250 and £1,000 on servicing. “I only did 5,000 miles a year,” says Richard. “The novelty was beginning to wear off. A club is the ideal solution, you can get the latest models so you never get bored.” How much would it cost to do 4,500 miles in your own Ferrari F430 Spider F1?

• Cost of finance (£138,500 at 7 per cent APR): £9,695 • Insurance (35-year-old, clean license): £4,200 • Yearly service: £2500 • Set of tyres: £970 • Depreciation: £19,920 Total: £34,384 or £6.88 per mile. Figures courtesy of ecurie25


We’re not just supercars. We’re a way of life.

The only private members supercar, yacht and jet club in the world, giving you exclusive access to special events. Carl Thomas 07901 823907 email CarlThomas@revoworld.org www.revoworld.org


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Boats and Yachts

Boats and yachts Two thirds of the earth is covered by water. Explore it in style. that remains unused for much of the year. But the fact is, few things say you have ‘made it’ like casually offering to take a few friends out for a daytrip on your very own

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The outright ownership of a yacht is far from a practical proposition, with a high buy-in cost, increasing annual costs and notwithstanding that a yacht is a depreciating asset

yacht, so there are no shortage of consumers ready to splash the cash. But for many, the cost remains tough to swallow and harder still to justify, given the occasional na-

ture of use. For those who can afford it, the figures don’t really add up to sound economical practice and the majority of people could not even begin to contemplate yacht ownership. As we have seen in other categories, it is scenarios such as this where fractional ownership comes into its own through reducing your initial outlay and ongoing expense, whilst still providing you the bene-

fit to use a fully managed asset as if it were your own. A fractional boat plan offers a realistically priced means of enjoying time on the water. As with all fractional plans, you purchase a share of the asset and are, thus, allocated an amount of usage time. This is an ideal way to make the most of both your time and your money. An additional advantage comes in the form of managed maintenance. Fractional boat


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Boats and Yachts plans include a monthly fee that covers mechanical maintenance and upkeep, insurance, mooring fees and valet services, as well as the associated company administration. In terms of actual sailing time, each yacht is typically available for around 40 weeks per year but this varies dependent on the specific scheme. The remaining downtime is used to carry out preventative maintenance and servicing.

“ofAsthea member Global Superyacht Club you gain a real sense of belonging. you have your own skipper and crew on your home yacht

To take Voyage Yacht Share as an example of how the service typically works, Voyage manage all aspects of your yacht from crew to concierge, with their fractional arm offering 28 days on the water across a number of key locations. Each yacht comes complete with a full-time crew and all members have access to a 24-hour cruise director concierge service complete with ‘call ahead’ yacht provisioning. Then there are the things that you may take for granted but can be a drag when organising your own trip, such as having the yacht cleaned before each trip with fresh linens and towels provided. Then there are the extended benefits of having a fractionally owned yacht, such as guest privileges at the finest yacht clubs around the world, as well as some clubs offering the bonus of such things as golf club memberships and exclusive resorts. Eusamarine are one the most experienced fractional yacht ownership companies providing motor yachts and large sail yachts. They offer not one but three distinct fractional ownership programs offering entry-level and two advanced schemes. Each provides a guaranteed amount of sailing time and time not utilised by individuals is offered to other Eusamarine members before being offered for charter, thus potentially covering member’s management costs. With the advanced programs all owners are automatically part of the Global Superyacht Club, which allows you

access to not only your own home yacht but also a fleet of 10 similar yachts across the world’s most glamorous destinations at no additional cost. Managing director Keith Smith further explains the benefits “As a member of the Global Superyacht Club you gain a real sense of belonging- you have your own skipper and crew on your home yacht and we utilise a sophisticated database system that allows you to have your own personalised definition of luxury replicated across the worldwide fleet. It’s all about individual needs and helping you identify and serve your unique requirements to provide you with the ultimate yachting and lifestyle experience.” Fractional Ownership is not just an opportunity for experienced sailors, as Jonathan Duffy, managing director of SailTime explains: “We cater for customers across the range, from experienced sailors to people who have an interest in sailing but don’t know how to get into it” he says. “We provide training to show people the ropes aboard the yacht.” Duffy goes on to explain the model followed by SailTime: “Each month, you have a minimum of seven sailing times which you can schedule yourself for weekend, weekday, evening or week-long sailing using our state of the-art SailTime Scheduler. You choose when you’d like to go sailing. With 40+ bases around the world – we have more locations and yachts than any other company with further expansion scheduled for next year. We also offer SailTime Power as part of a recent expansion to include the Sealine range of power cruisers.”

train“ingWetoprovide show people the ropes aboard the yacht

And it’s not only luxury yachts, sailboats and power cruisers that are available on a fractional basis. RIB Shack Marine takes their name from the rigid inflatable boats, which are powerboats fitted with inflatable collars. RIBs are suitable for use in all sorts of conditions and are some of the most versatile boats available; they are used as rescue boats by the RNLI, as patrol boats by the military, as work boats in the North Sea, as race boats in international competitions, as tenders to yachts and superyachts, and as

general-purpose all-round cruising boats by families around the world. Compared to yachts and highend sailboats, the costs involved in purchasing and running an RIB are low and, as such, RIB Shack Marine can keep their members’ guaranteed levels of usage high, with each craft having just four equal owners. Each has access to their boat for 13 weeks of the year, with owners, therefore, having a minimum

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A SLICE OF THE HIGH LIFE

of one week of use in every month. The period of ownership is three years, after which, the boat is sold and the net proceeds equally divided between the four owners. Colin Vine, director of Rib Shack Marine, says, “Our fractional ownership scheme allows members to spend lots of quality time with their families experiencing the thrill of their RIB on the open water. We take all the hassles of

fixing, cleaning and servicing away for an all-inclusive fee.” The yacht and boat fractional market really encapsulates what fractional ownership is all about, whether you require a multi-million pound superyacht, a luxurious sailboat or an RIB for day cruising and the odd spot of waterskiing, all are on offer, demonstrating that there is something out there to suit all tastes and all budgets.


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Private Aviation

Private aviation The luxury of private air travel at a fraction of the cost Even those that enjoy the actual flying experience would not argue that the initial jostling and queuing, arriving hours early for check-in, enhanced security leading to increased delays, generally crowded planes with cramped accommodation and other associated drudgery is not exactly fun. Even as a small percentage of the approximately 2 billion air passengers that travel every year, there are an awful lot of people out there looking for something more out of their flying experience. It is fair to say that the vast majority would rather be flying privately, but is this only an option available to the super-rich? Not if you’re travelling fractional. Private jet travel is becoming more popular for the cash-rich, time-poor consumer in today’s world and the

signs are that it is set to continue. With flexible schedules and destinations to suit you, a super-slick airport process, extra security and the potential for entertaining friends and clients but, ultimately, to just travel and arrive in impeccable style, nothing can match your own private jet. There are a wide range of different options available, ranging from fractional ownership programmes, fractional card and membership programmes, charter card programmes and on-demand charter. Firstly, there is actual fractional ownership, where one buys a share of a plane; as a part owner, you have access to ‘your’ plane at short notice. Just like with other fractional models, your annual use of the aircraft corresponds to your share size. At the end

of your contract, which typically lasts around five years, you sell your share back to the management company, which is valued based on the current market price of your plane, less a remarketing fee. In addition to your share, you pay a monthly maintenance fee for the upkeep of your plane and crew, and a separate hourly fee for your flight time. The ‘fractional’ card and membership programme is an asset-sharing rather than a fractional model, so there is no actual ownership involved. Instead, you simply prepay, much as you would with a pay as you go phone card (although £10 of airtime in this case doesn’t get you very far). When you’ve used your allotment, you simply purchase another card. One key distinction in card programmes is the source of the planes and crew. Fractional cards provide you with access to the same aircraft and crew that fractional owners receive. Charter cards draw from the wider array of charter operators. The structure of the programme itself is based on either hour/plane or debit models. In the latter, you prepay and each trip is deducted from your card balance, and in the former, you pay based on the accumulated flying hours (i.e. excluding preparation of the craft), which are debited from your account in a similar fashion to prepay. So which format is best for you? Well, the keyword there is you. Where do you want to fly, how short a notice period do you require for your needs, do you have a provider preference and even the apparently small details such as how much baggage you reg-

ularly need to carry, for example, if you regularly carry skis or golf clubs, as certain smaller craft are immediately ruled out, are down to you. Also, there is obviously some financial risk involved in owning your own personal share of a plane, so you need to weigh that up. As with any fractional decision, there is also the release of financial concern cards require a smaller initial investment than ownership, as this can run into millions of pounds. One of the companies who seem to have all the bases covered is luxury travel provider Avolus as they offer a range of asset-sharing and fractional opportunities. The Avolus Card covers the asset-sharing market by catering for both business and private customers with a prepay scheme which allows card holders to use their credit against private transportation in a number of different vehicles - for example you could take a chauffeured car to the airport to pick up a waiting private jet. The system is designed to seamlessly integrate each leg of your journey and not only covers cars and jets but also helicopters and yachts. Through Avolus' exclusive representation of Jetfly in the UK they also

offer a fractional ownership program in single-engine (SOCATA’s uber fast TBM 850 and Pilatus’ versatile PC-12) and twin engine (Piaggio’s brand new luxurious Avanti II) turboprop aircraft. Particularly when traveling within Europe, a jet is not the most efficient way of getting around and Jetfly’s turboprop aircraft offer jetlike efficiency at a substantially lower price point and with a lower environmental impact. Alexis Grabar, Avolus managing director & founder added, ‘At Avolus, we pride ourselves on our ability to anticipate our clients’ needs, tailoring each individual trip with a highly personalised service. Via Jetfly’s ‘green’ fractional ownership program and our ad hoc charter service, we provide affordable luxury travel solutions, allowing our clients to concentrate on the more important things in life.’ To make the decision process slightly easier, many companies offer the full range of options. Fractional ownership providers include the aforementioned Jetfly, Netjets, European Business Jets and Bombardier Flexjets in the UK, along with a whole host of others in the more advanced US market.

What’s the alternative? If full fractional ownership is not the right choice for you then traditional jet chartering might present a better alternative to enjoy private jet travel. This model allows you to pay for each trip individually or through a block purchase of flight time by using a jetcard program. This provides much of the flexibility of fractional ownership without the legal tie-ins. With fractional ownership you own shares in a single aircraft. A downside of this model is that the aircraft can only be used by one owner at a time. Therefore, if two or more owners want the jet at the same time, alternative aircraft need to be sourced by the supplier. If you have selected to part own a jet then you would expect to have ‘your’ jet available at all times, something that is unfortunately not always possible. In these instances fractional aviation providers often must turn to charter services. Fractional ownership also tends to work better on a large scale whereby you make a large number of regular trips. Through charter companies such as 247jet, who own their fleet of Cessna Citation jets, you can ensure greater availability and a consistently high level of service. 247jet provide an affordable alternative to individuals and families who appreciate the privacy and the flexibility of being able to fly direct to their destination without all of the unpleasant hassle of large airports. Through chartering, a small group of individuals can travel to their chosen destination at a cost on a par with business class Talking business, we all know that time is money- so the lack of tedious check-in procedures and the use of smaller local airfields allows you to be collected from closer to your home or office, with you landing closer to your destination, something which helps you to save both time and money. Paul Mulligan, chairman of 247jet, explains the appeal: “With our service, you just drive up to one of our planes and of you go. We’re deadline-driven with 3 crews per aircraft. One of which is always on permanent standby so we can provide a rapid response service and put the fun back into flying. Chartering also provides a clear up-front pricing structure and removes any uncertainty such as the residual value of a fractional share.”


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AN INDEPENDENT SUPPLEMENT FROM MEDIAPLANET ABOUT FRACTIONAL OWNERSHIP, DISTRIBUTED IN THE TIMES

A SLICE OF THE HIGH LIFE

Case Studies

Home from home Marqued out from the rest

Maria Archer, 42 years old, is a partner of a telecoms consultancy and a member at 47 Park Street. She has two children who go to boarding school in Ireland, aged 13 years and 16 years. She is originally from Dublin and regularly returns for business on average one week a month. She left Dublin 7 years ago. She recently moved from Monaco to live in Dublin in September 2007. Maria owns four properties: In West Cork, in Valbonne France, in Monaco and in Megeve. Their fractional ownership of a two-bedroom residence at 47 Park Street (bought 10 months ago) is effectively their 5th property. “When you have multiple homes, you do not want to have any more hassle or worry. I just wanted somewhere where I could close the door and walk away without having to worry about emptying the fridge. At the same time, I didn’t want anything anonymous,” says Maria. “We found out about 47 Park Street through a property developer friend in Ireland at a time when we were deciding whether to buy an apartment in London. We needed something more than a

hotel but didn’t want the hassle of maintaining an apartment. After seven years, I had had enough of staying in hotels and wanted something homely.” Maria tends to go straight to their London office from the airport, and then returns to her residence at 47 Park Street at the end of the day. “The staff are very friendly and give that sense of familiarity which is really important for a woman travelling on business regularly. It gives you a feeling of security.” At the end of the day, Maria likes to invite her business associates back to the residence for dinner meeting or a social drink. On these occasions, the staff will pre-stock the fridge with ordered items for the dinner. “Having the extra bedroom is really useful too. It means we can bring the kids to stay during the holidays and it also means that colleagues can stay over after a late meeting.” “I find the fractional membership brilliant value for money. At a time when the London hotel room prices are fluctuating, the membership at 47 Park Street is a one-off payment that does not rise in peak seasons. It means I can plan my budgets carefully and manage cash flow without having to worry about an expensive accommodation in London during the Christmas season for example.” “We had a VIP Russian partner visiting during our stay at Park Street and we arranged for him to stay in a second apartment. The staff took great care to look after him, which was a great asset.”

Supercar ownership has numerous pitfalls - parking, security, luggage space, speed bumps and the police all curtail your supercar fun. While owning a supercar comes with a long list of perks, it is actually driving one that offers the most grins-per-mile. Accordingly one of the fractional world’s growth areas has been in asset-sharing prestige car clubs. A wealth of choices is out there for consumers looking to spend their hardearned on automotive indulgence. In

such a competitive sector, success depends on service and a unique selling point. Entering the ring is Marque II. With the strapline “a sports car when you want one, not when you don’t”. Their unique selling point is a doorstep delivery service. Graham Beswick of Marque II explains “Although supercar clubs look to remove the pitfalls of full ownership, one major hassle remains- collecting the car and getting acquainted

with its nuisances on unfamiliar and congested roads. Other companies charge for delivery. While we charge for 24/7 delivery and collection across Europe, members can have their vehicle of choice delivered and collected for no extra cost to any central London postcode. Members can enjoy Audi R8, Ferrari 575 Maranello and others across an average of 60 days (dependent on how points are spent) and up to 5,000 miles per year.”


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AN INDEPENDENT SUPPLEMENT FROM MEDIAPLANET ABOUT FRACTIONAL OWNERSHIP, DISTRIBUTED IN THE TIMES

A SLICE OF THE HIGH LIFE

Property

The best of the best Best Group offer part ownership among properties in the world’s highest performing markets, with opportunities spanning South Africa, Caribbean and New Zealand, and their ethos is to offer the best in luxury property with none of

the traditionally associated hassles, with all arrangements handled via the company’s London office. “We like to say that all the owners have to worry about is what to pack” says Brad Lincoln, Best Group CEO.

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The company’s most recent launch is in one of the world’s most sought after destinations—New Zealand. One of the traditional concerns about fractional ownership is that the location is only desirable for part of the year, but their New Zealand properties are located so as to take advantage of both summer and winter sports, helping owners obtain maximum rental yields, as well as flexibility in their own use. Even greater flexibility is offered through the fact that owners are automatically part of an exchange scheme, meaning that they can use other properties within the group in other parts of the world. One such group of properties— available to New Zealand owners at no extra cost or as an individual opportunity—is Villas on the Green, St. Lucia. As Brad elaborates, “One of our owners at Villas on the Green returned from their first two-week stay in their property last weekend. They enjoyed not only the property, but also free membership of the only championship golf course on the island. They were able to walk from their house on the 7th fairway to the clubhouse to tee off or enjoy lunch. They are also members of the beach club, only a matter of yards away. This gave them access to a state of the art spa and gym, and exclusive use of an on beach bar and restaurant. We even provided wi-fi access on the beach, so that the owner could keep an eye on his business back in the U.K. whilst relaxing in the sun.”

Q&A We speak with Mike Balfour, founder and Co-chairman of Fitness First and now founder and chairman of the Hideaways Club. 1. What is the philosophy behind the Hideaways Club and what sets it apart from other providers? The philosophy of the HWC is simple. To offer the discerning traveler the use of fantastic luxury properties in varied locations while sharing in the appreciation of the entire property portfolio. The properties are fully managed so none of the usual ownership hassle and members can also use the services of a local concierge so they can concentrate on enjoying their vacation. 2. How do you see the benefits of fractional ownership over sole ownership? Sole ownership requires the owner to visit the same location year after year, which from the feedback we receive is a cause of concern to many. With the HWC portfolio members can vary their vacations and perhaps be a little more adventurous than before. The investment advantage is that the varied locations chosen for the properties by HWC allows for the appreciation of the portfolio to be spread and not be dependent on one market. 3. How do you go about selecting your property locations? HWC listens first of all to its membership who have been very helpful as to where they would like the portfolio to locate next. As well as this feedback the club work closely with industry professionals as to the best locations be they in established destinations or the new up and coming hot spots. 4. How do you see the fractional market in the future? We feel the concept of fractional ownership will develop and grow in Europe. It is a maturing, widely accepted and multi billion business in the USA with investors recognising that fractional ownership is the best way to invest in and utilise expensive assets.

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affordable

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FRACTIONAL PROPERTY OWNERSHIP JOIN OUR LIFESTYLE CLUB YOUR HOLIDAY HOME OR AN INTERNATIONAL PROPERTY PORTFOLIO FOR A FRACTION OF THE COST

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WHEN YOU PAY A FRACTION YOU COULD OWN MORE THAN ONE!

SPREAD YOUR INVESTMENTS OVER SEVERAL COUNTRIES Dubai - Luxury Studio £7,000

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New Zealand. What you have always wanted

Wanaka. Penthouse living in the great outdoors. Own a fully furnished, fully equipped, 3 bed, 2 bath, outrageously spacious penthouse overlooking the lake. Spend each year in some of the best heli-skiing territory in the world, and then lounge on your massive sun-deck as you throw some fresh fish on your barbecue. Or pull back the glass walls and create a space that reaches out across the lake to claim the mountains.

less than £85,000 A one tenth share costs NZ$ 235,620 and entitles you to five weeks of personal use. Management costs are about £1,850 per year, and rental history suggests an income of over £3,200 should you rent it out.

Corsican Cove. Style and lifestyle; the best of both. 4 bedrooms, 3 bathrooms, 2 floors, 1 landrover and nowhere else like it. You can own an incredibly chic house, with over 3,300sq ft of living space set in ¾ acres. It comes fully furnished and fully serviced. We’ll even give you a car to go with it.

about £140,000 A one tenth share costs NZ$ 380,000 and entitles you to five weeks of personal use. Management costs are about £2,900 per year, and we estimate an income of over £4,800 should you rent it out.

Call on 0845 130 9022 or e-mail info@thebestgrp.com to receive a registration form or to ask any questions. www.thebestgrp.com



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